Cheaper housing may cost more in long run

The house hunting adage that home prices drop $1,000 or more for every mile you drive out of a city is being turned on its head by a new survey that factors in transportation costs, "Pennywise, Pound Fuelish." Compact urban places like San Francisco and New York City magically become more affordable in the Center for Neighborhood Technology index, while deals in neighborhoods around Akron, Ohio and Greeley, Colo. suddenly seem less attractive.

The premise is simple: Housing is generally considered affordable if it costs 30% of income, which adds 111,000 neighborhoods to the affordable list. Including the cost of gas, automobile upkeep and insurance for commuting, shopping and "just getting around" pares that list back to 48,000 neighborhoods.

In fact, the review of all 337 metropolitan areas of the United States, funded by the Rockefeller Foundation, found that household transportation costs alone can sap another 32% of income -- and that does not even begin to touch environmental costs.

The center recommends that policymakers include transportation costs in determining the affordability index of development proposals and that the true cost of living in exurbs and suburbs be disclosed to home buyers and renters. Chicago and San Francisco have incorporated transportation in their planning and U.S. Rep. Earl Blumenauer of Oregon has introduced a bill to require consumer disclosure.

Calling the index "long overdue" during a teleconference, Ron Sims -- deputy secretary of U.S. Housing and Urban Development -- said the federal government needs to go through a cultural change to look at "not only how many highways we build...but building neighborhoods that are sustainable."

"We see people defaulting on their mortgage because they did not realize they had a transportation cost and a mortgage," Sims said. "When people move away, they often move away from schools and other infrastructure, such as grocery stores, so they have an added cost of movement."

Roy Kienitz, undersecretary for the U.S. Department of Transportation, agreed, saying that the DOT has abundant information about "every single mile of roadway...but not much information about whether our policies...are moving people in the right direction."

Those recommendations paddle against a strong current of outward migration. Census figures continue to show migration -- not including immigration -- moving away from many major metropolises. A recent New York Times story on these "peregrinations" and other similar coverage suggests that some of these modern day migrants are not seeking to commute back into the city, but instead are looking for a different life -- telecommuting, working part-time or stepping out of the rat race altogether and farming or working less-demanding jobs.